Wednesday, March 07, 2012

Daily Market Commentary: Partial Recovery

Buyers stepped in to eat some of yesterday's losses but it wasn't enough to reverse the course of the selling.  None of the indices 20-day MAs were breached to the upside, meaning shorts will still have their opportunity to attack tomorrow.

The Nasdaq is best primed for a short attack.  Today finished just below the 20-day MA as the breakdown gap was closed. Today's modest buying did enough to reverse yesterday's 'sell' trigger for on-balance-volume.


The semiconductor index enjoyed the best of the buying as bulls stepped in at the 50-day MA. But the buying wasn't enough to stop a net bearish turn in technicals for the index.  However, there should be significant support around 400 if the 50-day MA fails.


The S&P didn't quite make it to its 20-day MA. Technicals are relatively unchanged from yesterday: The earlier 'bear' triggers for the MACD and +DI/-DI intensified their decline, but there were no new technical 'sell' triggers



The Russell 2000 was able to attract buyers at its 50-day MA.  Short term traders may have enough to see a rally to test its 20-day MA with 814 resistance an alternative target.


Thursday will test the resolve of buyers following today's buying. The proximity of 20-day MAs will offer shorts an opportunity to build positions. Small Caps and Semiconductors offer the most room to house a rally - but will bulls want to take the opportunity?

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Dr. Declan Fallon is the Senior Market Technician and Community Director for Zignals.com. I offer a range of stock trading strategies for global markets which can be Previewed for Free with delayed trade signals. You can also view the top-10 best trading strategies for the US, UK, Europe and Rest-of-the-World in the Trading Strategy Marketplace Leaderboard. The Leaderboard also supports advanced search capability so you can tailor your strategies to suit your individual requirements.

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